from the dancing-without-end dept

Sometimes I think purgatory must be filing a lawsuit over a wrongful DMCA takedown notice. I'm pretty sure that's how Stephanie Lenz feels. After all, she's been fighting against Universal Music issuing a bogus DMCA takedown against her dancing baby, and I'm pretty sure that "baby" will be graduating high school before too long. Last we'd checked in, the Supreme Court was debating hearing the appeal in the case, and had asked the White House to weigh in. The White House responded last month with a truly bizarre argument, agreeing that the 9th Circuit's ruling contained a "significant legal error" but said that this case was "not a suitable vehicle for correcting that mistake."

Whether it was for that reason or for no reason at all, the Supreme Court has now decided not to hear the appeal, meaning that the case is back (once again) in District Court, where it may actually go to trial to determine if Universal Music knew that the video was fair use when it issued the initial takedown.

As we've discussed time and time again, this particular case is an important one, if Section 512(f) of the DMCA -- the part that says you cannot file bogus DMCA takedowns -- is to have any teeth. The problem, right now is that there are piles upon piles of abusive DMCA takedowns, targeting all sorts of content that is perfectly legitimate and non-infringing. Yet, because there is basically no punishment for issuing such takedowns, they continue. Unfortunately, this particular case keeps coming out with "mixed bag" rulings that probably won't help very much in the long term. While we may have hoped that the Supreme Court would clear things up and make sure 512(f) actually does its job, it appears that's unlikely to happen any time soon.

The music community’s grievances are the following: (1) The DMCA allows internet service providers to build ad-based businesses built upon infringing content that the artists cannot effectively police through “notice and take down” procedures; (2) If and when service providers pay the artists, it’s on the providers’ hopelessly complex terms, resulting in payments that offer fractions of pennies per view; (3) Service providers offer “free” teaser music to the public when copyright owners should have the absolute right to control distribution of their music.

(1) The DMCA sucks, but it sucks the way studios and labels wanted it to. Now they don't like it and they want to change it to suck in a different way. They're also arguing for "notice and STAY down," which works out great for labels/studios… unless they're inadvertently targeting their OWN site with unvetted DMCA notices.

(2) "Hopelessly complex terms" are included in almost every royalty agreement. Service providers don't have a monopoly on this behavior.

(3) If copyright owners want "absolute control," they're free to pull their music, movies, etc. from services they don't like. Not many have, because not many are willing to give up this revenue stream they constantly claim isn't paying enough. As for the artists themselves, they have no "absolute control" -- not if they're signed to a label. Young may be writing about screwed artists, but he's really only interested in protecting the "rights" of gatekeepers.

He confirms this by claiming major labels deserve to be treated better than other copyright owners.

Free music streaming is fair only for original, home-based music. However, what the public streams mostly comprises of premium, professional content. This content is expensive to create, risky to market and requires many behind-the- scene professionals.

It's OK for service providers to screw the little guy. But don't mess with the majors. They have oh-so-many mouths to feed -- mouths that are more deserving of revenue than creators that don't cut them in on the deal. Young wants a better deal for artists, but with a caste system attached.

Here's more:

Every minute, 400 hours of footage is uploaded to YouTube, much of it synched to copyrighted music. [Note: citation needed.] This gives YouTube a distinct advantage over Spotify, Tidal, Apple Music and other services that do not offer user-generated streaming of works they do not control.

Much of this YouTube footage is monetized with paid ads. YouTube retains a minimum of 45 percent of this revenue, at prices it sets (but does not reveal), irrespective of the content’s creation costs.

Major label music should "pay" more -- whether it's a premium in subscription fees or a larger cut of advertising revenue payouts. Why? Because it costs more to make. But production costs have little to do with pricing -- and that includes advertising revenue.

If we lived in Young's world, tickets to "Paranormal Activity" (production budget: $450,000) would be $5 and tickets to "Avatar" (production budget $425,000,000) would be $4,700. [Productions costs taken from here.] Buying My Bloody Valentine's "Loveless" would bankrupt music fans just as certainly as it nearly financially destroyed the label that released it, while Owl City's basement-produced hit album could presumably be had for a handful of pocket change.

Young -- and the label he worked for -- appear to believe the internet owes them a living. But just them. Not the rest of these shabby artists the labels are unwilling to gatekeep for.

Once Young has finished deliberately misunderstanding how markets work, he moves on to the point of his op-ed, which begins with him recycling the stupid "built on the backs of artists" trope that presumes no service provider could ever become successful without engaging in copyright infringement. Then he goes right off the rails.

I would argue for stronger, industry-wide measures: a complete repeal of the safe harbor provisions of the DMCA and a prohibition on any unauthorized uploading of the property of others.

The first part is insane. Young actually wants service providers to be fully responsible for the actions of their users. Like the ongoing attacks on Section 230 of the CDA, this is a very lazy, very dangerous attempt to paint targets on the backs of those who have money, rather than perform the more difficult work of targeting the users who actually commit copyright infringement, make defamatory statements, etc.

This line of thinking says labels and studios need do nothing more than bitch loudly and expect everyone else to solve their problems -- whether it's websites, legislators, or internet service providers. This is how they "protect" their artists. By complaining stupidly and demanding the internet be torn apart and rebuilt to their specifications, damn the collateral damage.

The second part is just moronic. Every site prohibits unauthorized uploadings. Active efforts are made to police uploaded content and any site that wants to stay alive for long sets up a DMCA agent to respond to takedown notices. But it's never enough. Young apparently feels current prohibitions just aren't prohibitive enough, as though there were a magical tech solution somewhere that might prevent any unauthorized uploading from taking place ever again, if only service providers weren't so busy raking in billions on the backs of major label artists.

The whole op-ed is an embarrassment. But, unfortunately, it's par for the course in major label/studio arguments. It's worse than the blind leading the naked. It's the ignorant leading the angry. It's short-sighted rent-seeking by people who somehow think they can force more revenue out of service providers by destroying the protections that have allowed them to prosper.

from the it's-all-about-the-theoretical-Benjamins dept

Ronald Satish Emrit -- like my two preteen sons -- is convinced YouTube is going to make him rich. However, Emrit's sole contribution to this effort so far has been eight music videos… and a $325,000,000 lawsuit.

COMES NOW, the plaintiff Ronald Satish Emrit, who is bringing forth this cause of action against all seven defendants looking to assess joint and several liability. Presumably, the defendants would seek contribution and indemnity from each other through the filing of cross-claims. Accordingly, the plaintiff is suing all seven of the defendants for a remedy at law amounting to $325,000,000 (three hundred and twenty-five million dollars).

Backstory:

Emrit signed up with Blue2Digital, paying it to upload his videos to the major label-backed Vevo channel. At some point recently, Emrit's videos were removed from Vevo. In response to the variety of injuries supposedly suffered by Emrit, a lawsuit has been filed against Google, Universal Music Group, Sony BMG, Blue2Digital, Vevo and (mysteriously) Warner Music Group. (Warner Music Group has no partnership agreement with Vevo.)

That $30 [$30 in today's dollars] is the root of Emrit's multiple complaints.

The plaintiff used a company called Blue2Digital (i.e. the fourth defendant) to have his music videos distributed onto the Vevo platform used by major record labels and their artists; the plaintiff paid approximately $30.00 to have his music videos distributed.

Emrit is certain these defendants owe him a shit-ton of money. He definitely has lots and lots of "damages" for which he'd like to be recompensed. He calls the removal of the videos from Vevo's channel "negligence" because the defendants "had a duty of care and duty of loyalty to safeguard the plaintiffs intellectual property in the form of the eight music videos."

In addition, the removal of the videos pained Emrit greatly (and actionably):

The plaintiff claims that all seven of the defendants have committed the intentional infliction of emotional distress (IIED) because it is and was extreme, outrageous, and egregious for them to remove eight commercially-released music videos copyrighted by the plaintiff.

He also maintains that his eight videos -- swimming in a sea of millions -- were all he needed to become a highly-successful recording artist. Emrit was destined for greatness, but for the tortious interference performed by a mega-conspiracy of industry titans.

The plaintiff argues that all seven of the defendants committed the tortious interference with business relations/contracts by removing all eight of the plaintiffs commercially-released music videos which would thereby prevent the plaintiff from being able to secure a commercial recording contract from any of the major record labels in the form of a "360 deal" with a cross-collateralization clause, controlled composition clause, and Minimum Delivery and Release Commitment (MDRC).

Emrit seems unaware that labels sign agreements with artists, not with content hosted on a third-party platform, uploaded by a third-party distribution company and monetized by a third-party YouTube channel.

His strongest cause of action is breach of contract:

The plaintiff asserts that all seven of the defendants committed a material breach of contract by accepting a payment from the plaintiff and subsequently removing his eight commercially-released music videos from the Vevo platform.

The problem with this is actually several problems.

First, any breach of contract would be solely Blue2Digital's, which accepted his money in exchange for placement with Vevo. But the terms and conditions he agreed to plainly point out -- like so many do -- that these can and will change without notice.

You acknowledge that Blue2Digital may change the scope of its services from time to time and without notice to You. Blue2Digital shall be under no obligation to stream or otherwise use Your Content.

On top of that, it appears the terms of service weren't breached by Blue2Digital. Instead, it looks as though something automated went haywire, resulting in Vevo booting all of Blue2Digital's uploads to that channel.

Thank You for being patient, as we know your videos have been down for the past few weeks. This was due to a glitch found in VEVO's system, which they believe was a botted program used by one of our clients. This lead to a long and tedious investigation, which policy was enforced and your videos being suspended until further notice.

This was posted in August. This has replaced the original Blue2Digital Vevo FAQ, which can now only be accessed via archived pages. The new page notes that Blue2Digital will be working with UMG going forward. Paying customers can still get their videos uploaded to the Vevo channel, but they'll have to perform additional steps.

UMG will need from us clearance from all artist regarding their works and master sound recordings, including copyrights and licensing agreements (If Applicable) for any samples found in your works before any videos or albums can be restored.

Failure to provide this information will automatically disqualify you from receiving our services. Please note that UMG has the right to refuse distribution for any song, video or any other content owned by you at it's own discretion.

Emrit may not like the fact that his videos were removed from Vevo, but it doesn't appear to be the result of "contract-breaking" conduct by Blue2Digital. Instead, it appears to be the result of bad behavior of another Blue2Digital customer... or the sort of "content management" infighting that will only become more common as IP enforcement is handed over to automated taskmasters.

In addition[!] to the $325,000,000 in damages, Emrit also demands the following:

The plaintiff is also requesting the equitable remedy of an injunction or specific performance mandating that the plaintiff Ronald Emrit be offered a commercial recording contract by either UMG, Sony BMG, or WMG in the form of a "360 deal"...

If he does nail down this last demand, let's hope no one feels obligated to hand him an advance. With $325 million in hand, Emrit should be able to pay for his own recording costs.

Emrit, serial litigant, seems to feel the federal judicial system is his own small claims court. He's out $30 here, but wants $325 million. In a 2014 case in which he sued Reverbnation over fees paid for banner ad placement, the judge pointed out that:

Federal courts have jurisdiction to hear civil actions where complete diversity exists between the parties and the amount in controversy exceeds $75,000.

[...]

In this case, Plaintiff alleges that he lost somewhere between $100 to $200 dollars in his dealings with Defendant. Despite the low amount of compensatory damages, Plaintiff requests $250,000 in punitive damages in order to meet the amount in controversy.

[...]

In this case, Plaintiff seeks punitive damages totaling 1250 times more than his claimed compensatory damages. Indeed, even if Plaintiff only claimed punitive damages of $75,000, the resulting ratio of 375 to one would still run afoul of the Due Process Clause.

It therefore appears, to a legal certainty, that Plaintiff cannot satisfy the amount in controversy threshold, and thus, the Court lacks subject matter jurisdiction over the case. Because the Plaintiff’s claim of subject matter jurisdiction “lacks an arguable basis [] in law,” Neitzke, 490 U.S. at 325, the Court should dismiss this case as frivolous…

And earlier this year, another judge in another court had this to say about Emrit's losses vs. damages.

Emrit alleges that he paid $160.00 to have seven music videos entered in the Independent Music Awards contest and that he “never heard back from” the defendants or their representatives after he submitted his videos. Emrit claims that the defendants never watched or judged his videos and he seeks monetary damages of $250,000 and an injunction mandating that the defendants accept an unlimited number of contest submissions from him free of charge.

[...]

His claim that his damages exceed the amount in controversy requirement are not supported by any legally cognizable calculation of damages.

If Emrit's inability to show cause doesn't get this case tossed, his damage multiplier of 10,833,333 certainly will.

In checking out the YouTube account of the guy who created it, Jim Mortleman, a more recent video posted just a few days ago popped up, entitled Nerdpunna - Smells Like Tweet Spirit. This was the same style video, using Twitter usernames to create an absolutely hilarious version of the famous Nirvana song. It was so well done (perhaps because Kurt Cobain's lyrics are so unintelligible) that I couldn't believe it had only around 2,000 views. So I tweeted it, joking that people should check it out before it got taken down.

A bunch of people started retweeting and linking to it, with many of them commenting on how great the video was or how funny it was. Even people who aren't Nirvana fans were talking about it. A few examples:

And there were many more like that. In short: the damn thing is really funny and super well done. After realizing that his video was suddenly getting an influx of traffic, the creator of it, Jim Mortleman (who says that the videos are actually a group project in finding the profiles, which he then puts together in the video) tweeted me that he was pretty sure he was safe because he'd been alerted that UMG was "monetizing" his video -- which is one of the options in YouTube for copyright holders if they want to make money on someone using their work, rather than taking it down.

From his YouTube screen, it actually showed that Universal Music had blocked the video in one country while monetizing it elsewhere:

However, just a few hours later, as the video started getting more and more attention, views and tweets... apparently Universal changed its mind -- and if you now visit the page, this is what you see:

Mortleman says that within YouTube it's now officially blocked in all countries. This is a ContentID match, rather than a direct takedown, though the company clearly made the decision to switch it from monetizing it to taking it down -- so someone made a decision.

And it's a hellishly stupid decision. The video was fantastic and didn't take anything away from the song. It certainly wasn't a replacement for the song and, if anything, was likely to draw a lot more interest to the song and remind people of its existence. I'm not a huge fan of the song, but have been humming it to myself all afternoon because of that video (which I ended up watching a few times).

Also, this seems like a pretty clear case of fair use -- though I imagine some will disagree. The hilarious use of twitter user names to create alternative lyrics to the song is quite transformative. No one was watching this video as a replacement for the original song, but because the video itself sort of celebrated the song with alternative lyrics made up entirely of Twitter profile names where "Here we are now, entertain us" because "Huey Long Gnarl Emma Talus" (if you haven't seen the actual video... it's much funnier in the way it was presented). And now it's all gone and you can't see it.

All because of copyright law and UMG's total lack of a sense of humor.

Even if you think the fair use case is bunk and that the video is infringing and UMG is totally, 100% in the right to do what it did, I'm curious how this helps UMG in any way, shape or form. It doesn't help them get any more money, and it just makes people pissed off. How is that a smart business decision?

Update: Jim has now posted a silent version of the video so you can see what it looks like, though it's really not the same effect (though you can try to line up the audio with it to try to replicate the effect):

from the not-really-a-'dispute'-system-then,-is-it? dept

If nothing else, Universal Music Group is becoming a case study for everything that's wrong with YouTube's takedown system. Between nuking its own artists' official videos, targeting MegaUpload's video simply because it utilized some of its roster and using its direct partnership with YouTube to blow past any fair use considerations, UMG has been able to wreak a fair amount of havoc.

Norwegian musician Bjorn Lynne… has had two of his videos hijacked by Universal Music Group (UMG) which is now running ads alongside his work.

“Can I just state publicly that I hate Universal Music Group. For the second time now, they have hijacked my music and claimed ownership of it in all YouTube videos that include my music, thereby monetizing my music,” Lynne writes.

Lynne isn't exaggerating. UMG owns the rights to an audiobook that uses one of Lynne's songs as a backing track. No problem up to this point, because anyone -- even UMG -- can use Lynne's tracks if properly licensed, which this apparently was. No, the problem is that UMG is claiming -- by proxy -- that it "owns" Lynne's track.

UMG have entered the audiobook in YouTube’s Content-ID system, and as a result they’ve hijacked the ads on the original video.

Which is why leaving infringement detection up to algorithms is a bad idea, even if doing otherwise is technically unfeasible. According to Content ID, the backing track belongs to UMG. That's a problem, but it's a fixable one. All it would take is for UMG to release the claim after having the error brought to its attention. But UMG clearly isn't in the business of resolving disputes. It's just there to claim everything Content ID says belongs to it, even when the content clearly doesn't.

“One thing would have been to have done this unwittingly, by mistake. But I have ‘disputed’ the claim on YouTube, written an explanation and told them about the origins of this music — then waited the FULL 30 DAYS that the claimant has to process the dispute, only to be told that UMG have reviewed the dispute and UPHELD their claim!” Lynne notes.

That's the process available to indie artists: sit back and let major players claim your stuff. If Company A rejects your dispute, the decision is final. In YouTube's eyes, the burden of proof always falls on the accused and the existence of proof ultimately has no bearing on the outcome. All the claimant has to do is push the "REJECT" button and someone else's ad money will be rerouted.

Lynee could fight this further, but it would take a stack of money and some ambitious lawyers -- neither of which most indie artists have at their disposal. The only thing UMG has to do is what it did: shrug and return to siphoning money away from Bjorn Lynne. The system works -- at least for the major players. For everyone else, it's just a matter of trying to mitigate the damage they can't prevent, much less reverse.

from the look-at-that dept

Over the last few months, you may have noticed that ASCAP, BMI and the various music publishers have been pushing strongly to end the so-called "consent decree" around music publishing. This was an agreement from 1941 (and reviewed in 2001) limiting how performance rights organizations like ASCAP and BMI could act, given their position as a somewhat natural monopoly over the compositions they represented. The idea was to stop those companies from holding those works hostage -- which is why there are things like rate setting procedures by the Copyright Royalty Board. Now, we have our problems with the CRB and the rate setting process, but there is a very real fear that ASCAP, BMI and others would make music streaming prohibitively expensive if given the chance. The whole focus on getting rid of the consent decree is to try to remove any effort to block them from jacking up their prices to ridiculous rates.

The attempt to ditch the consent decree seemed especially odd, given that just months earlier, a court had called out the clear collusion by ASCAP and a bunch of music publishers to try to artificially jack up Pandora's rates. The details were a little convoluted, but basically certain publishers "withdrew" certain music from ASCAP, claiming they wanted to negotiate directly with Pandora. They didn't negotiate in good faith, and basically waited right up until the deal was about to expire. They then refused to even name what songs would no longer be covered, leaving Pandora at a very real risk of streaming songs it no longer had the right to (without even knowing which songs were being "pulled.") Because of this, Pandora was forced to sign exorbitantly high rates, which ASCAP and others then used to try to get even higher rates for others. It was clearly collusion, because while ASCAP should have been upset about publishers withdrawing music, it clearly was not. Furthermore, there were clear discussions between ASCAP and the publishers about all of this.

The end result of that case was that ASCAP lost its attempt to really jack up rates to Pandora much higher, but many people wondered how ASCAP could get away with doing that without any sort of punishment. Well... new reports say that the Justice Department is
investigating ASCAP, BMI, Universal Music Publishing and Sony/ATV over possible collusion. This is being done as part of the DOJ's review of the consent decree, but ASCAP's decision to attack the consent decree right after a court called it out for collusion may backfire badly:

The CID requests are seeking documentation across a lot of particulars, including the effect of the consent decrees on rates, whether partial withdrawals of digital rights should be allowed, and plans to license other rights beyond the public performance rights that PROs handle today. However, a memo obtained by Billboard that was sent to employees by ASCAP senior VP of legal Richard Reimer began by noting that the CID is connected to the DOJs review of the consent decree. And, as a possible reminder to be careful of what you wish for, the DOJ is also investigating of alleged coordination among ASCAP, BMI, Sony/ATV Music Publishing, and Universal Music Publishing Group.

That aspect of the DOJ investigation was mentioned in a note to ASCAP employees telling them to "preserve all documents, whether in paper or electronic format, on all the CID-related topics."

In the Billboard article, the publishers and ASCAP insist they're not worried about all of this because they believe the judge in the Pandora rate setting case "got it wrong." That's quite a bit of hubris to have, given all of the evidence of collusion that was presented in that case. It seems quite possible that rather than ending the consent decree, as ASCAP and publishers would like, the DOJ may actually come down on all of them for some fairly serious antitrust problems.

from the oh,-so-it's-like-a-CD,-only-more-expensive dept

The years when the compact disc was the preferred audio format were some of the most profitable years in the recording industry's history. Both vinyl fans and cassette collectors purchased albums they already owned in the new format. Why? Convenience. It replaced vinyl's bulkiness with something that could be carried around comfortably by the hundreds, if needed. It also solved the cassette's biggest issue, saving music fans from the tedium of manually rolling the tape to a favorite track via the inexact science of button mashing.

The CD was simply a more convenient format and claimed to be damn near indestructible if properly cared for. (Sadly, the jewel box was rarely up to the task of being the CD's protector, as the all-important CD-holding center pins/braces usually disintegrated upon purchase.)

Universal Music Group recently did a low key introduction of a new hi-res audio format called High Fidelity Pure Audio. The launch was kicked off at the Dolby headquarters in London on June 20th and the format became available in France first, which seemed like a great place to dip the product’s toe in the water without having picky audio journalists noticing.

So what exactly is this stealth format? High Fidelity Pure Audio (HFPA) is basically a Blu-ray disc that delivers 96kHz/24 bit audio recordings in three lossless formats: uncompressed PCM, DTS HD Master Audio and Dolby TrueHD. Most discs include the option to download MP3 and lossless FLAC versions of the songs as well. The discs will also play on any Blu-ray player or PS3 device.

If you haven't felt your heart skip a beat or a surge of mild interest, don't bother checking your pulse. You're very much alive, in contrast to the offering before you. Yet another attempt to reinstate a long-gone profit margin which will be greeted with the sort of public indifference that can scarcely be bothered to expend energy on a shrug.

If this were a novel experiment, it might be greeted with enthusiasm from a few high-end stereo afficionados and loads of ridicule from everyone else. But it's all been done before and even those willing to throw lots of money at an audio system have bought a ticket for this ride too many times before.

Didn’t we just play this game about 10 years ago with the DVD Audio disc and SACD, formats that both failed miserably? While it’s laudable that Universal is even considering bringing a higher fidelity product to the marketplace, haven’t they learned anything from history?

UMG has not. Or if it has, this new format isn't the based on anything it's learned. People may decry the quality of compressed audio, but nothing else comes close to it for portability and convenience, Bobby Owsinski points out.

[I]mprovements in fidelity happened along the way in most formats, but almost as a byproduct of the technology. Nowhere in this stream did the majority of consumers choose to replace a format simply because it sounded better.

UMG may think there's an underserved niche market that needs to be filled, but any physical music format at this point is really a niche. I don't think it's actively trying to fill a void as much as it's trying to see how many people are willing to purchase something again in a shiny, new format. That's really not how "repeat business" is supposed to work.

I have to imagine the costs of this effort are going to outweigh the profits, which in an industry that has spent 15 years hollering about how uncomfortable its deathbed is, makes absolutely no sense at all.

[Personal note: visiting the Google-translated High Fidelity Audio Disc site, I was greeted with the following message, possibly indicating I may not be the target audience for this product.]

from the letter-and-spirit dept

The last big news in the ongoing fight between Universal Music Group and Grooveshark (and its parent company Escape Media) came back in July, when a New York court rejected UMG's argument that the DMCA's safe harbors didn't apply to pre-1972 sound recordings, because, technically, those recordings are not covered by federal copyright law. This was in keeping with the ruling in the fight between EMI and MP3Tunes, and seemed most consistent with the intent of DMCA safe harbors.

Naturally, UMG appealed, and in doing so made some compelling arguments about the wording of the law. The appellate court agreed, and has now issued pretty much the opposite decision: pre-1972 sound recordings are not covered by the DMCA (pdf and embedded below) and thus Grooveshark has no DMCA safe harbors for such songs.

There are a few different parts to the ruling, but the core argument is straightforward: section 301(c) of the Copyright Act explicitly states that no "rights or remedies" under common law copyright on pre-1972 recordings shall be "annulled or limited" until 2067, and it's pretty hard to argue that the DMCA doesn't do that:

Initially, it is clear to us that the DMCA, if interpreted
in the manner favored by defendant, would directly violate
section 301(c) of the Copyright Act. Had the DMCA never been
enacted, there would be no question that UMG could sue defendant
in New York state courts to enforce its copyright in the pre-1972
recordings, as soon as it learned that one of the recordings had
been posted on Grooveshark. However, were the DMCA to apply as
defendant believes, that right to immediately commence an action
would be eliminated. Indeed, the only remedy available to UMG
would be service of a takedown notice on defendant. This is, at
best, a limitation on UMG’s rights, and an implicit modification
of the plain language of section 301(c). The word “limit” in
301(c) is unqualified, so defendant’s argument that the DMCA does
not contradict that section because UMG still retains the right
to exploit its copyrights, to license them and to create
derivative works, is without merit. Any material limitation,
especially the elimination of the right to assert a common-law
infringement claim, is violative of section 301(c) of the
Copyright Act.

For defendant to prevail, we would have to conclude that
Congress intended to modify section 301(c) when it enacted the
DMCA. However, applying the rules of construction set forth
above, there is no reason to conclude that Congress recognized a
limitation on common-law copyrights posed by the DMCA but
intended to implicitly dilute section 301(c) nonetheless.

...

Under such circumstances, it would be far more
appropriate for Congress, if necessary, to amend the DMCA to
clarify its intent, than for this Court to do so by fiat.

Take note of that last bit, because this ruling has made it more true than ever. And that's where the problems come in. It seems pretty clear that there is some sloppy drafting in how the DMCA is written (which isn't a surprise), in that what you have is wording that can be read this way, even though it clearly goes against the intent and purpose of the DMCA. If the DMCA's safe harbors don't apply to pre-1972 recordings, then the DMCA's safe harbors no longer apply at all to any service that includes music. That can't be what Congress intended, even if the wording of the law can be read that way.

Thus, if you go strictly by the wording, while ignoring the intent, the logic of the decision is sound, but the implications are disturbing: as Grooveshark pointed out in their defense, this interpretation would gut the DMCA. One of the key purposes of safe harbors was to prevent online services from needing to proactively scan for infringing works, since that would drastically and unfairly limit their growth, and we wouldn't have things like YouTube today if that were the case. But if pre-1972 recordings (which is plenty of material) are not included, then user-generated content sites do have to scan everything. And while it might be somewhat easier to identify pre-1972 recordings than it is to identify infringing uploads, it would still be insanely prohibitive — not to mention the massive loss to our culture from having a huge chunk of music history mostly vanish from the internet.

It's a little unclear just how far-reaching this ruling will be (it's at the state level, and it is in itself explicitly contradicting the earlier MP3Tunes ruling, which it declares to be "wrongly decided") but the potential implications are huge. Exempting all pre-1972 recordings from the DMCA would impact all corners of the internet in a bad, bad way. The only optimistic thought is that perhaps it would force congress to revisit the law, and we could finally push for a Digital Millennium Copyright Act that actually works in the digital millennium.

from the a-sad-tale-of-copyright-destroying-innovation dept

We've written a few times about the sad case of Veoh. Veoh was a YouTube-like site, funded by Hollywood insiders like Michael Eisner, but who got sued by Universal Music Group, claiming copyright infringement (using more or less the same theories used by Viacom against YouTube). Technically, Veoh sued first (filing for declaratory judgment after receiving a threat letter from UMG, but UMG quickly followed with its own lawsuit). UMG played dirty, not just suing the company but directly suing its investors as well. This was a pure intimidation technique, designed to scare major investors into either pulling investment or ordering the company to change course, even if what they were doing was legal. While the court dismissed the charges against the investors (and scolded UMG in the process), the intimidation might have worked. In the middle of all of this, Veoh shut down, because it ran out of money, mainly due to the lawsuit. It sold off its assets to another party, and somehow scraped together a little money to keep the lawsuit, and just the lawsuit, going.

Since then, there have been a series of rulings that have repeatedly found Veoh to be legal and protected under the DMCA's safe harbor. The district court found in Veoh's favor, as did the 9th Circuit appeals court. Yesterday, the appeals court ruled again on the issue, with a superseding opinion that, once again, says that Veoh was legal. Even though it's still dead. The ruling not only reiterates the importance of DMCA's safe harbor protections for user-generated sites like Veoh, but also shows how that still applies even given the 2nd Circuit's slightly weaker view of the DMCA safe harbors.

The court goes through a nicely detailed explanation for why Universal Music's interpretation of the DMCA doesn't make any sense at all and would not only create internal conflict within the law, but also make the safe harbors effectively meaningless. Specifically, Universal Music tries, ridiculously, to argue that DMCA safe harbors aren't supposed to apply to any service that makes files accessible to the public. As the court points out, if that were the case, the law would be silly, since copyright holders would never learn about that infringement anyway, since the works wouldn't be available for them to find. The court points out it's ridiculous to think that DMCA safe harbors were only meant to apply to backup services.

We do not find persuasive UMG’s effort to reconcile the
internal contradictions its reading of the statute creates by
positing that Congress must have meant § 512(c) to protect
only “web hosting” services. Web hosts “host” websites on
their servers, thereby “mak[ing] storage resources available
to website operators.” The thrust of UMG’s argument seems
to be that web hosts do not undertake the sorts of
accessibility-facilitating functions that Veoh does, and thus
the services they perform “fit within the ordinary meaning of
‘storage,’” and thereby “harmoniz[e]” with the notice and
takedown procedures. UMG’s theory fails to account for the
reality that web hosts, like Veoh, also store user-submitted
materials in order to make those materials accessible to other
Internet users. The reason one has a website is so that others
may view it. As amici note, these access activities define
web hosting – if the web host only stored information for a
single user, it would be more aptly described as an online
back-up service.

The court also rejects a theory -- popular among some of our maximalist commenters -- that the DMCA was only intended for purely "web hosting" companies, rather than being broadly applied across various online services such as user-generated service providers. As the court noted, if Congress wanted to limit the safe harbors in that manner, it would have said so: "Had Congress intended to
include such a limitation, it would have said so expressly and
unambiguously."

The next damaging part for Universal Music: Veoh was really good at taking down videos when it received DMCA notices. UMG tried to argue that Veoh had knowledge of infringing works on its site that it didn't remove. This argument is the crux of the YouTube/Viacom case as well: is "actual knowledge" from DMCA notices, or what kind of knowledge creates "red flag" awareness. The DMCA can be read in self-contradictory ways at points. For example, it says that a provider only has to takedown content if it receives a DMCA notice that follows somewhat strict procedures. But, then, also talks about if there's "red flag" awareness. Take both literally, and you could, for example, wonder what happens if someone sends an improperly structured DMCA notice (say, missing certain elements), but indicates infringing works, nonetheless. Is that "red flag" knowledge? Here, as in the YouTube case, though, UMG relies on a much broader definition of red flag knowledge, in which it kind does a "but they must have known!" sort of thing. It's basic argument: there was music on Veoh, and Veoh had to know that was infringing. The court is not buying it. First of all, just because there's music, it doesn't mean it's infringing.

As an initial matter, contrary to UMG’s contentions, there
are many music videos that could in fact legally appear on
Veoh. “Among the types of videos subject to copyright
protection but lawfully available on Veoh’s system were
videos with music created by users and videos that Veoh
provided pursuant to arrangements it reached with major
copyright holders, such as SonyBMG.” Further, Congress’ express intention that
the DMCA “facilitate making available quickly and
conveniently via the Internet . . . movies, music, software, and
literary works” – precisely the service Veoh provides – makes
us skeptical that UMG’s narrow interpretation of § 512(c) is
plausible. S. Rep. No. 105-190, at 8. Finally, if merely
hosting material that falls within a category of content
capable of copyright protection, with the general knowledge
that one’s services could be used to share unauthorized copies
of copyrighted material, was sufficient to impute knowledge
to service providers, the § 512(c) safe harbor would be
rendered a dead letter: § 512(c) applies only to claims of
copyright infringement, yet the fact that a service provider’s
website could contain copyrightable material would remove
the service provider from § 512(c) eligibility.

Later on, the court makes a key point that we've reiterated over and over again -- every time copyright holders and maximalists insist that service providers need to become copyright cops -- that the service can't become copyright cops because they have no idea if stuff is actually authorized or not:

Copyright holders
know precisely what materials they own, and are thus better
able to efficiently identify infringing copies than service
providers like Veoh, who cannot readily ascertain what
material is copyrighted and what is not.

That message is something that the various lawyers representing MPAA and RIAA affiliated companies should be forced to write on a blackboard over and over again until the point is driven home.

Of course, in the YouTube case, with the original district court ruling, there were similarly strong statements, but the 2nd circuit walked it back somewhat, suggesting that a different standard need apply to "red flag" knowledge. Here the court points out that, even if that's true, Universal Music would need to show a lot more to prove any red flag knowledge.

Of course, a service provider cannot willfully bury its
head in the sand to avoid obtaining such specific knowledge.
See Viacom Int’l v. YouTube.... Even viewing the evidence in the light most favorable
to UMG as we must here, however, we agree with the district
court there is no evidence that Veoh acted in such a manner.
Rather, the evidence demonstrates that Veoh promptly
removed infringing material when it became aware of specific
instances of infringement. Although the parties agree, in
retrospect, that at times there was infringing material
available on Veoh’s services, the DMCA recognizes that
service providers who do not locate and remove infringing
materials they do not specifically know of should not suffer
the loss of safe harbor protection.

The ruling goes on in this nature. It's definitely a good ruling that lays out, yet again, why the DMCA safe harbors protect internet companies, and blasts holes in the silly theories of some of the big legacy players that have tried to wipe out those safe harbors. It does send one small issue back to the lower court -- an exploration of whether or not Veoh is due certain fees (excluding attorneys fees). This is more of a procedural issue than anything else.

So, once again, Veoh has proven that internet services like it are protected by the DMCA from being blamed for users infringing. And yet, the fact that it had to effectively shut down and just sell off its assets, is a reminder of just how much the big copyright players can stifle and kill off innovative services via copyright law, even when they have no case.

from the yeah,-THIS-makes-everyone-respect-copyright-MORE dept

Here we go again. Less than 24 hours ago, content-protection bots killed a livestream of the Hugo Awards, thanks to the brief appearance of fully approved clips from an episode of Dr. Who. The whole situation was completely absurd to anyone harboring the tiniest vestige of common sense, but IP-protection software isn't built on common sense: it's built on algorithms.

The video, posted by the official YouTube account for the convention, DemConvention2012, was blocked, according to YouTube, for ostensibly infringing on the copyright of one of many possible suspects:

This video contains content from WMG, SME, Associated Press (AP), UMG, Dow Jones, New York Times Digital, The Harry Fox Agency, Inc. (HFA), Warner Chappell, UMPG Publishing and EMI Music Publishing, one or more of whom have blocked it in your country on copyright grounds.
Sorry about that.

When contacted by Wired for comment, Erica Sackin, an Obama campaign staffer who works on digital outreach, had no knowledge of the outage, asked this reporter for the url and then upon seeing the takedown, said, "I'll have to call you back."

The video has since been updated to state that "This video is private." There's probably quite a bit going on behind the scenes at the moment, but fortunately Wired snagged the complete list of claimants for future reference.

Take a good, long look at that list. There's a few of the usual suspects in there, including AP, UMG and Warner, entities not known to be shy about claiming content that isn't theirs.

Now, these entities aren't directly responsible for this takedown. This is more of an automated match situation, but it still doesn't change the fact that the inherent stupidity of the action, automated or not, does absolutely nothing to lock down stray, unmonetized content and absolutely everything to highlight the ridiculous nature of copyright protection in a digital age.

If Google can work with copyright holders to produce content matching software, it seems like it might be possible to designate certain accounts or entities as "off limits" from the wandering killbots. If the stream is authorized by, I don't know, the party of the current President of the United States, maybe, just fucking maybe, everything's "above board."

Sure, defining legitimate, pre-approved accounts may prove to be as difficult as determining which content is infringing and which isn't, but this should be the sort of thing that content holders should be working toward, rather than simply moving from disaster to disaster, smugly secure in the knowledge that filthy file sharers are getting content-blocked thousands of times a day.

Nice going, huge list of content holders. Your boundless, maximalist enthusiasm is just another nail in the coffin containing what's left of copyright's reputation.